By Team B2





Balanced Scorecard Overview
Advantages
Disadvantages & how to overcome them
Comparison to MBO & BPR
Deployment
 Timeline
 Four perspective


Conclusion
Q&A

“BSC is a set of measures that gives top
management a fast but comprehensive view of
the business” (Kaplan & Norton 1992)

Illustrate the links between today’s actions and
tomorrow’s goals (Kaplan & Norton 1996)

4 Perspectives – Financial, Internal business,
innovation & Learning, and Customers

Created to tackle the overreliance on financial
performance indicators
Financial
Business Customer
Goals
Internal
Business
Learning
(Norreklit et al 2008)
Kaplan & Norton 1992





Comprehensive & balanced view
Framework - what to be done and measured
Links between measurements & cause-andeffect relationships to business strategy
Corporate vision & strategy  meaningful
measures for both manages and employees
Long term approach

Implementation – complicated:
 BSC  top management tool; learning hindered
(Johanson et al 2006)
 Partial implementation – selective and shorten time
requirement
 Treat BSC as a broad learning approach and not
mechanically

Management isolation (Norreklit et al 2008)
 Managers need to be familiar with business
operations

Oversimplification
 Careful study of circumstances and modify accordingly

Time lagging – different perspective require
different time scales
 Set a time-frame/ timeline

Measurement prone to manipulation
 Clearly define measuring process
 Emphasis on the ‘learning approach’ as opposed
to promoting/ firing appraisal
Advantages
BSC



Clear goals & Measurements
with links to strategy
Comprehensive & Balanced
View
Long-term structured approach
MBO


BPR



Managers & employees collaborative goals defining
(including time-frame  best
way to obtain goals to improve
performance
Less time consuming
Clear framework to measure
organizational performance
Systematic approach
Innovation orientated –
improved productivity
Disadvantages




Management isolation
Time consuming
Complex
Manipulation

Open-ended system  too
much focus on easily
quantifiable financial;
overlooking other equally
important measures
Short-term looking
Less comprehensive/
imbalanced
Lack of shared vision and goals
Lack of interaction within
workforce
Focus on short term financial
criteria





Goals
Measures
Reduce Production
Output per hour
Cost of sales
Develop Sale strategy
Gross Profit Margin
Operating Profit Margin
Cash flow
Goals
Measures
Identify new group of
customers
Inventory Turnover
Identify specification for
new groups
QFD
Survey and Questionnaire
Results
Goals
Measures
Develop sale strategy
Gross Margin
Operating Profit Margin
Invest £160k on
marketing
Balance sheet
(Intangible assets )
Rearrange internal
production operation
and number of employee
Employee Turnover
Administration Costs
Goals
Measures
Invest in new
technology
ROA, ROE
number of patents
Identify
enhancements
QFD
Increase military
sales team
Gross Profit
Turnover
Year 1
Year 2
Year 3
Year 4
Year 5
•Increase rescue/military sales team by one person and make two production operatives redundant
•Review the SeaSpray and Seahorse markets and target other groups of potential customer in order to develop sales strategy
•Spend 15 000GBP on media to better position our products publicly – TV ads, campaigns, attend exhibitions.
•Identify enhancements for customer requirements and their costs – invest 45 000 GBP on technology
•Continue new user groups identification
•Invest 55 000 GBP on marketing
•Evaluate customer feedback on the recently implemented technology
•Further identify new enhancements – invest 60 000 GBP on technology
•Review sales strategy and evaluate against sales trend
•Invest further 37 000 GBP on marketing
•Review sales strategy
•Invest further 35 500 GBP on marketing
•Invest 22 500 GBP on Technology – in reference to customer feedback on past enhancements
•Invest 17 500 GBP on marketing, increase intensity in successful groups
•Invest 22 500 GBP on Technology – in reference to customer feedback on past enhancements
•Evaluate business strategy – assess success and rooms for improvements
Similarly to other approaches, it has pro’s and
con’s. However, for WaveRider’s case, BSC is
most suitable as it not only does it provide a
comprehensive view of the business, but it
also focuses on measures other than
financial, which in turn, translate to
sustainable long term improvement strategy.












Alstyne, M., Brynjolfsson, E., Renshaw, A. (1997). The matrix of change: a tool for BPR.
Cambridge: MIT sloan school of management.
Dinesh, D., Palmer, E. (1998). Management by objectives and the balanced scorecard: will rome
fall again?.Management decision, 36(6), 363-369.
Gupta, V., Rohe, D. (1997). Houston business process re-engineering share group: a case study.
Business process management journal, 3(2), 173.
Johanson, U., Skoog, M., Backlund, A., Almqvist, R. (2006). Balancing dilemmas of balanced
scorecard. Accounting, auditing & accountability journal, 19(6), 842-857.
Kaplan, R. S., Norton, D. P. (1992). The balanced scorecard- measures that drive performance.
Harvard business review, 83(7/8), 172-180.
Kaplan, R. S., Norton, D. P. (2001). Transforming the balanced scorecard from performance
measurement to strategic management part 1. Accounting horizons. 15(1), 87-104.
Larsen, M., Myers, M. (1997). BPR success or failure? a business process reengineering project in
the financial services industry. Auckland: association for information system.
Norceklit, H., Jacobsen, M., Mitchell, F. (2008). Pitfalls in using the balanced scorecard. The
journal of corporate accounting and finance. 19(6), 65-68.
Norton, D. P., Kaplan, R. S. (1996, January-February). Using the balanced scorecard as a strategic
management system. Harvard business review, 75-85.
Pereira, R. (2011). Why HoshinKanri?. Retrieved from http://lssacademy.com/2011/01/03/whyhoshin-kanri/
Rodgers, R., Hunter, J. E. (1991). Impact of management by objectives on organisational
productivity. Journal of applied psychology monograph, 76(2), 322-336.
Zairi, M., Al-mashari, M. (1999). BPR implementation process: an analysis of key success and
failure factors. Business process management journal, 5(1), 87.